J.L.T. Agro, Inc. v. Balansag and Cadayday

G.R. No. 141882, 11 March 2005

FACTS:

Don Julian contracted two marriages. He had two children with the first wife Antonia and 4 children on the second wife Milagros. The present controversy involves a parcel of land which was originally registered in the name of Don Julian and Antonia. Don Julian married Milagros without partitioning the properties in his first marriage. To avoid conflict, the parties entered into a Compromise Agreement which embodied the partition of all the properties of Don Julian. The above parcel of land was included to be the share of Milagros and her children. Milagros took possession of the said property which was subsequently sold to respondents herein. Respondents, upon registering the said land discovers that the title to the above land was on the name of Petitioner herein.

Don Julian after the execution of the Compromise Agreement executed a Deed of Assignment of Assets with Assumption of Liabilities to petitioner which transfers the ownership of the subject land in favor to the petitioner. Don Julian died intestate.

ISSUE:

Whether or not a future legitime can be determined, adjudicated and reserved prior to the death of the testator.

RULING:

Yes. Well-entrenched is the rule that all things, even future ones, which are not outside the commerce of man may be the object of a contract. The exception is that no contract may be entered into with respect to future inheritance, and the exception to the exception is the partition inter vivos referred to in Article 1080 which states that: “Should a person make a partition of his estate by an act inter vivos, or by will, such partition shall be respected, insofar as it does not prejudice the legitime of the compulsory heirs.”

The partition will, of course, be effective only after death. It does not necessarily require the formalities of a will for after all, it is not the partition that is the mode of acquiring ownership. Neither will the formalities of a donation be required since donation will not be the mode of acquiring the ownership here after death; since no will has been made it follows that the mode will be succession (intestate succession). Besides, the partition here is merely the physical determination of the part to be given to each heir.
The partition inter vivos of the properties of Don Julian is undoubtedly valid pursuant to Article 1347. However, considering that it would become legally operative only upon the death of Don Julian, the right of his heirs from the second marriage to the properties adjudicated to him under the compromise agreement was but a mere expectancy. It was a bare hope of succession to the property of their father. Being the prospect of a future acquisition, the interest by its nature was inchoate. It had no attribute of property, and the interest to which it related was at the time nonexistent and might never exist.

Evidently, at the time of the execution of the deed of assignment covering Lot No. 63 in favor of petitioner, Don Julian remained the owner of the property since ownership over the subject lot would only pass to his heirs from the second marriage at the time of his death. Thus, as the owner of the subject lot, Don Julian retained the absolute right to dispose of it during his lifetime. His right cannot be challenged by Milagros Donio and her children on the ground that it had already been adjudicated to them by virtue of the compromise agreement. However, it was proven that there was no evidence showing the acceptance by the petitioner as the donee. Such acceptance will never be presumed being Don Julian as the Majority stockholder of such Corporation.

WHEREFORE, the decision of the CA was affirmed granting ownership to respondents herein. Costs against petitioner J.L.T. Agro, Inc.